Personally I would take the leash off of Tel-Aviv. I would let them go all out. They rightfully posses the land. Let them defend it any way they see fit, and not handicap them by telling them not to escalate.
As far as the rest of the middle east if I didn't get full co-operation of a country in the middle east concerning terrorism I would make damn sure I made them realize that only full co-operation would be tolerated. It sounds harsh but the fact is all great empires have fallen due to a lapse somewhere.(Think Roman, Ottoman etc..) If we want to ensure the safety of American society for the future you have to take a hard-line approach. It is the only way. Also, to all the liberals out there who feel that if we treat everyone with kid gloves and play nice it will be ok you are severelly(sp?) mistaken. And by all accounts were probablly the kid that got beat up for his lunch money everyday. If you do not draw the line you WILL be picked on or taken advantage of. Or worse in this case.